Last year I wrote an article on one of the best benefits for Microsoft Employees – that benefit just got even better! I’ve highlighted three benefits that I believe all Microsoft employees should take advantage of.
401(k) Increase: While previously, a Microsoft employee could contribute $18,000 to their 401(k) in 2017, they can now contribute an additional $500, bringing 2018’s contribution limits to $18,500 for those under age 50 and $24,500 for those age 50 and over. Microsoft will still match the 50% on your regular pretax, Roth, and/or catch up contributions up to $9,250.
After-Tax Contribution: The big surprise this year was the increase in the After-tax Contributions (Non-Roth). Last year’s $20,000 available contribution was one of the best perks that few employees knew about. This year they have increased that to $27,250! On top of that, there is now a little box you can check to automatically convert your After-tax contribution to Roth 401(k) each quarter. You must pay ordinary income tax on the gains you earned each quarter, but that is a small price to pay to sock away $27,250 in Roth dollars this year. Remember too – there is no income limit on this strategy, every employee can do it.
Wellness Reimbursement: Most employees know about the “Wellness Reimbursement” benefit that allows you a free gym membership. However, if the gym isn’t your thing, you can get up to $800 reimbursed towards health and sports equipment, a great benefit that few know about. We recommend you mention it to your Financial Advisor and see if it can play a role in your Financial Plan.
James Nevers,CFP® is a Senior Advisor at Soundmark Wealth Management, LLC. James works closely with physicians, business owners, directors and executives at Amazon, Microsoft, and Boeing, and other successful individuals to help them define their financial goals and implement an ongoing financial planning process.